Bitcoin is currently experiencing a sharp corrective phase, with prices dropping over 2.5% in the past 24 hours due to intense selling pressure and heightened volatility. This downturn was triggered by a significant liquidation event caused by large institutional offloading, leading prices to fall below critical short-term levels. As we approach the end of July, Bitcoin’s struggle to regain momentum above $118,000 suggests the possibility of a deeper pullback. If bearish pressure continues, we could see BTC price sliding towards the $112,000 to $110,000 range before finding stability.
The big question now is whether Bitcoin will be able to initiate a recovery back above $119,000 before the monthly close, which is crucial for a potential rebound towards the $124,000 to $126,000 range.
The recent drop in Bitcoin price can be attributed to a combination of bearish macroeconomic factors and crypto-specific pressures. One major catalyst was the renewed hawkish sentiment from the U.S. Federal Reserve, which has pushed back expectations for rate cuts. This has led investors to explore other investment options, putting pressure on Bitcoin. Additionally, large institutional players have been offloading their holdings, as indicated by outflows from Bitcoin ETFs. Moreover, whale wallets have seen an increase in inflows, signaling a potential sell-off. The liquidations triggered by the price drop, especially among long traders, have further exacerbated the decline. If selling pressure persists, Bitcoin price may test the $112,000 to $110,000 range.
Looking ahead, what can we expect from the Bitcoin (BTC) price rally this week? After consolidating around the key resistance of $118,500, the price plummeted below the local support level of $115,500. This pullback has pushed the rally below a critical range, setting the stage for a potential drop to a pivotal support zone.
Technical indicators such as the Bollinger bands, RSI, CMF, and OBV point towards a bearish scenario. The Bollinger bands have squeezed, indicating a decrease in volume and volatility, potentially leading to a descending consolidation. The RSI has dropped sharply, signaling a weakening rally. The CMF and OBV have both shifted downwards, confirming the growing influence of bears in the market.
As we head into the weekend, the Bitcoin price rally could see a turnaround. If the price manages to reclaim $118,000, we can expect a move above $120,000. However, if it fails to defend the $110,000 support zone, a deeper correction may follow. It’s essential to monitor these key levels and indicators to gauge the direction of Bitcoin’s price movement in the coming days.